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Territories in 1997, but we are not concerned

with that situation in this paper.

5. In the face of two such disagreeable options,

further thought has been given to the possibility

La future

that the Chinese Government might recognise that

(a) Without a continuing assured income

(b)

(c)

(a)

of foreign exchange from Hong Kong

plans for economic rehabilitation of

China itself might be jeopardised;

unless they show some sign that they

will not interfere in any way pre-1997,

confidence in the Colony may well start

ebbing by the mid-70s, thus prejudicing

the Chinese earnings of foreign

exchange before economic rehabilitation

has got under way;

in their own hands Hong Kong is most

unlikely to remain the economic power

house which it is under present British

rule;

even the period up till 1997 might be

insufficiently long for them to

accomplish their economic rehabilitation

and that it was therefore in their

interest to prolong beyond that date

our tenure of the New Territories and

also of Hong Kong.

It is inconceivable that a Government over which

Mao Tse-tung presides, even nominally, could take

such a line, but we should not totally exclude

from our calculations the possibility that a more

pragmatic successor Government might do so.

would, however, expect a price in return.

They

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3.

16.

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